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Hi Friends, this may be a simple question to ask but couldnt understand the below concept in SIP

(a) Power of compounding

(b) Rupee average cost

Please some one provide me link or explain with example.

Lets say in case of Bank FD after each year we get interest and that interest is added to principle amount and that becomes the new principle amount on which the next interest is calculated this is what the power of compounding i understand but how does the power of compounding works in SIP

 

I w ill be happy if someone clears my doubt.

Thankyou
asked in Mutual Funds by (200 points)

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1 Answer

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Hello,

The following links will help you to better understand SIP.

 

http://www.investmentkit.com/articles/2011/09/benefits-of-sip/

http://www.investmentkit.com/articles/2011/02/sip-presentation-from-reliance-mutual-fund/

After going through these links if you still have questions, you can reply here.

Admin

answered by (48.8k points)

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